LTC Properties Completes Sale of Preferred Care Portfolio for $77.9M

LTC Properties Inc. (NYSE: LTC) finalized a deal to fully divest its portfolio of 22 skilled nursing facilities operated by Preferred Care ahead of schedule, announcing the completion of the $77.9 million transaction on Thursday.

The Westlake Village, Calif.-based real estate investment trust (REIT) had been in the process of selling the group of 22 buildings for nearly a year, announcing its intention to move away from Preferred Care in May 2019.

More than 30 skilled nursing facilities associated with the Plano, Texas-based Preferred Care filed for chapter 11 bankruptcy protection back in November 2017, citing a raft of personal injury lawsuits. A federal judge this past December signed off on Preferred Care’s plan of reorganization, which saw the operator re-emerge as a network of 22 buildings owned by five different landlords.

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“We enjoyed a long, profitable, and amicable relationship with Preferred Care, and wish them much success with their newly reorganized company,” LTC Properties CEO Wendy Simpson said in a statement announcing the transaction. “We greatly appreciate their cooperation throughout their arduous bankruptcy and through this sales process.”

The $77.9 million figure includes 21 properties sold this past quarter across multiple transactions — totaling 2,500 beds in Arizona, Colorado, Iowa, Kansas, and Texas — as well as a single building that the REIT offloaded last year. Initially slated for completion in the second quarter of this year, LTC was able to complete the deal on an accelerated timeline.

In all, LTC walked away with a gain of $44 million on its Preferred Care exit, according to the company, based on a combined net book value of $35.6 million.

“These proceeds provide LTC with increased liquidity, and allow us to pursue opportunities for future growth, even in the midst of a particularly challenging environment,” Simpson said.

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